New SBA Administrator Announces Plans to Modernize Loan Process

By Adrienne Burke | Yahoo Small Business

SBA Administrator Maria Contreras-SweetIn order to "move the dial for entrepreneurs from all walks of American life," the new head of the Small Business Administration says she will launch initiatives to make the agency "modern and inclusive" and improve access to capital for minority and other underserved entrepreneurs.

In a speech at the Center for American Progress in Washington today, Maria Contreras-Sweet, whom President Obama appointed to the top SBA post two months ago, presented her goals to "assure a continuum of support, especially for our underserved businesses;" to expand access to capital, consultation, and contracting; and to "remain focused on our disaster assistance programs, so homeowners and business owners can access our help when they need us the most."

Contreras-Sweet, who said she spoke no English when she immigrated at age 5 to the U.S. from Mexico with her mother, outlined three priorities of her initial efforts at the agency:

Modernize and implement smart systems to keep pace with technological advances "that are changing how we do banking and conduct business" including using predictive systems to automate the SBA's credit analysis.

Tailor programs that "embrace our nation's dynamic demographics."

"Serve as a 'market maker' for small companies by opening new business channels within the federal government, corporate supply chains, and international commerce."

"The face of entrepreneurship is changing in America," Contreras-Sweet said in the speech. "More of those faces today belong to women, Latinos, African-Americans, Asian Americans, Native Americans, veterans, seniors, and business owners who are socially and economically disadvantaged. Too many in these groups cannot access the requisite expansion capital. Your gender, your race, your age, or your neighborhood should never impact whether you can get a small business loan. Only your creditworthiness should."

Effective next month, Contreras-Sweet said SBA will make available to its lending partners a "predictive business credit scoring model" that it has been testing for more than a decade. The model, to be applied to analyses of loans for $350,000 or less, combines an entrepreneur's personal and business credit scores for a total credit score that Contreras-Sweet said eliminates the need for "cumbersome analyses of a company's cash flow" and will make it easier and faster for banks to do business with the SBA. "This model is cost-reducing and credit-based. It ensures that risk characteristics – not socio-economic factors – determine who is deemed creditworthy," she said.

Contreras-Sweet also revealed plans for "SBA One," an interactive, user-friendly SBA lending platform that she said would automate document upload and form generation, and allow electronic signatures.

And she said that later this year she will announce a list of 14 communities to be helped by Scale-Up America, the SBA's successful entrepreneurship education program that provides business consulting, offers matchmaking with corporate and government buyers, and helps firms gain market intelligence.

Finally, she said, the SBA will open up new areas of business opportunity for small companies. "We will be adaptive to signals in the domestic and global markets, and we will create the conditions for entrepreneurs to secure government contacts, enter corporate supply chains, and export their products globally."